High-tech acquisitions by low-tech firms: Does acquirer experience count?

Maria Ihamuotila, Eva Liljeblom, Benjamin Maury*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We study whether experience matters for acquirers in non-tech sectors when conducting acquisitions of high-tech targets. The topic is motivated by the rapid development of advanced and digital technologies that has fuelled tech-related M&A volumes, where companies seek high-tech targets to substitute or complement their own R&D and to stay competitive. Studying 1146 tech-oriented deals announced by European acquirers during the period of 2006-2019, we find the acquirer investors to be clearly optimistic about such takeovers, with positive and significant two-day cumulative abnormal returns of 0,82%. We also find that industrial acquirers seem to gain substantially. Lastly, one-time buyers were found to experience significantly higher cumulative abnormal returns than frequent buyers, and frequent buyers to exhibit a weak declining return pattern in subsequent deals. This implies that companies get rewarded for acquiring digital technology, and especially so in their first initiative to digitalize their business.
Original languageEnglish
Peer-reviewed scientific journalNordic Journal of Business
Pages (from-to)1-31
Number of pages31
ISSN2342-9003
Publication statusAccepted/In press - 16.03.2021
MoE publication typeA1 Journal article - refereed

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance

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